FINAL

MASSACHUSETTS MEDICAL MALPRACTICE

REINSURANCE PLAN

GOVERNING COMMITTEE

Minutes of a Meeting

Wednesday, July 29, 2009

A Meeting of the Governing Committee of the Massachusetts Medical Malpractice Reinsurance Plan (“MMMRP”; the Plan) was held at the Executive Offices, 95A Turnpike Road, Westborough, MA on Wednesday, July 29, 2009 at 9:30AM.

The following members were present:

William T. McGrail, Chairman

Peter T. Robertson, Esq.

Gerald J. Cassidy

Richard W. Brewer, ProMutual

The following MMMRP Staff/Consultants/Sub-Committee members were present:

Susan S. Smith, Director of Administration

Moe T. Edwards, CPA, CFO

James R. Bacon, Investment Committee

Others present:

Matt Mancini, Esq., Division of Insurance

  1. Call to Order

Mr. McGrail called the meeting to order at 9:40 AM. Ms. Susan Smith kept a

recordof the proceedings. Ms. Smith also made several attempts to contact Ms. Jill Gold on her cell phone but was unable to do so (it was later learned she was in Canada and did not have service).

  1. Quorum and Notice

Mr. McGrail stated that four of the five committee members were in attendance, and that a quorum was present at the meeting. Mr. McGrail reported that the required notices for the meeting had been sent to the Secretary of State, Executive Office of Administration and Finance, and the Division of Insurance and placed on the Plan’s website.

  1. Minutes of Prior Meeting

Mr. McGrail noted the minutes to the previous meeting had been distributed to all in attendance. Mr. Brewer noted that two additions were necessary on pages 3 and 4. A motion was made and duly seconded to approve the May 7, 2009 Governing Committee minutes as amended. The motion passed unanimously.

The committee also reviewed the draft Annual Meeting minutes from May 7, 2009. There were no adjustments requested. These minutes will be brought before attendees at the 2010 Annual Meetingfor approval.

  1. Market Report – James R. Bacon

Mr. Bacon presented a comprehensive market report and discussion. He distributed asixteen-page packet of supporting paperwork dated July 29, 2009, and a copy is included with these minutes. Summarizing, his key points include: 1.) Banking sector recovery uneven, 2.) Consumer borrowing/spending low – savings high, 3.) Stimulus disappointments – basically unemployment, and 4.) GDPgrowth driven by exports, Capex and governments.

The committee took a five minute recess.

  1. Quarter 2 2009Unaudited Financials – Moe Edwards

Mr. Edwards presented the unaudited financials for the 2nd quarter of 2009. He distributed two packets of pertinent financial information and a copy of both is included with these minutes. He began by reviewing the Balance Sheet as of June 30, 2009, noting that $2.5 million was moved out of Madison into a 6-month Avidia CD earning 1.75% interest. In comparison, it was earning .24% interest at Madison. Mr. Edwards noted that we anticipate needing the money by the end of March. Mr. Edwards also pointed out that there was $34 million in investments, and that we had received $81,600 in membership fees as of June 30, 2009 and that more has come in throughout July. He continued with IBNR, noting that Towers Perrin hasn’t yet presented their report. The actuaries are predicting a $2 million favorable reserve for theyear, and more solid information will be available at the next ComplianceCommittee meeting. Mr. Edwards stated that Case Reserves had dropped to just over $15 million.

Next Mr. Edwards reviewed the Income Statement, noting that there was roughly $577k inearned premium, $266k paid in loss expenses, and the first loss payout of the year was at $500k. He further noted that the investment income was $219k, and that money had been moved out of the International ETFs into other funds. Mr. Edwards also reviewed the Statement of Operation – Statutory Basis, and noted that budget-to-actual figures were very close for most items, with the exception of the budgeted $1.9 million for the losses paid, compared toonly $500k paid as of June 30, 2009, adding that the quarter was far below what we had anticipated. He pointed out that we have $2 million in net earnings and if this continues, we would have a return of premium again, likely giving back between $2-$4 million in March 2010. This would require further projection from the actuaries to provide a more accurate figure.

Mr. Brewer wished to further discuss the Operating Budget. Mr. Edwards replied that our actuarial expenses are up since we are doing two studies per year. Mr. McGrail added that we were within 5% of budget with all expenses. It was noted that personnel expenses include salary, life and health benefits, etc. It was also discussed that the variation could be due to the retro of Mr. McGrail’s increase and the departure of Ms. Ivester. Mr. Edwards concluded that these figures should be in line by the end of 3rd quarter.

Mr. Edwards also noted the Incurred Losses and Loss Adjustment Expense page, as well as an additional packet which included the following reports: Ceded Policies in Force from Inception through June 30, 2009, Summary of Ceded Polices Written and Summary of Ceded Premiums.

Mr. McGrail reviewed the three additional reports, beginning with the Ceded Policies in Forcegraph and noting that it has been fairly steady. Citing the flat growth from the past two years, Mr. Brewer noted that the industry isn’t ceding much at the present time, and that there isn’t as great a demand on MMMRP’s services as there had been in the past. He added that he does not feel this trend will change much in the foreseeable future. He pointed out the declining revenue and the expense ratio. He stated that he would like the issue to be re-visited and to specifically discuss“What are the implications?”.

6. Other Business

Mr. Brewer wished to bring up several items for further discussion. To begin with, he inquired as to the chiropractor issue, and Mr. McGrail noted it had been resolved. He then stated the revenue trend which had been discussed previously.

Mr. Breweralso brought it to the attention of the committee that the equity portion of our investment strategy is higher than other insurance companies, noting that ours is 20% in equities, whereas other insurance companies are typically around 10-12%. He questioned if this is the right allocation, noting that it adds a measure of volatility.

Mr. Brewer questioned the form of the MMMRP’s administration. He would like this topic to be an Agenda item for the December 8, 2009 Governing Committee meeting. Mr. Cassidy noted that there had been afair amount of discussion on this topic in past meetings. Mr. Roberston requested that MMMRP locate the minutes with these discussions. Mr. Mancini expressed an interest in also receiving such minutes. Mr. Brewer added that ProMutual had written a letter to MMMRP outlining their concerns and inquired if there had been a reply to that letter. Mr. McGrail stated that meetings had been held with ProMutual on the letter.

Lastly, he requested that the 2010 Governing Committee meeting be held in July again since he has a conflicting meeting in early August every year.

Mr. McGrail reminded the committee that the next Governing Committee meeting will be held on Tuesday, December 8, 2009, and that an Investment Committee meeting is also scheduled for December 8, 2009. He also noted that he will need to change the date of the September 22, 2009 Investment Committee meeting due to a scheduling conflict. Ms. Smith will work with Mr. Bacon to determine an agreeable date. In addition, he requested a Compliance Committee meeting be scheduled soon.

A motion was made and duly seconded to move to Executive Session to discuss personnel matters. The motion passed unanimously by voice vote. Mr. Roberston, Mr. Cassidy, Mr. Brewer and Mr. McGrail voted in the affirmative. Mr. McGrail, Mr. Edwards, Mr. Manciniand Ms. Smith left the room. Mr. Bacon remained due to his position on the Operations Committee.

The July 29, 2009 Governing Committee meeting was adjournedout of Executive Session at 12:10PM.

A true record transcribed on August3, 2009.

______

MMMRP Chairman/Officer

Action Items:

Current:

Continue discussion of MMMRP revenue trend.

Add an Agenda item questioning the administrative processof the MMMRP on the December 8, 2009 Agenda.

Locate minutes with previous discussions on the topic of MMMRP’s existence. Distribute to committee members and Mr. Mancini.

Locate ProMutual’s letter outlining their concerns.

Locate reply correspondence to that letter.

Referthe allocation of the equity portion of our investment strategy to the Investment Committee. Consider if it should be closer to the typical allocation of 10-12% as opposed to the present 20% allocation.

Consider the request that the 2010 Governing Committee meeting be held in July again as one member has a conflicting meeting in early August every year.

Reschedule the September 22, 2009 Investment Committee meeting date.

Schedule a Compliance Committee meeting.

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